According to a recent report by Suvashree Ghosh for Bloomberg News, in the ever-evolving cryptocurrency space, where new blockchains seem to emerge daily, Tether, the company behind the world’s largest stablecoin, USDT, is taking a different path. Tether, however, has apparently decided not to launch its own blockchain, which goes against the current trend.
Tether CEO Paolo Ardoino explained the company’s reasoning in an interview with Bloomberg. He suggested that the blockchain market was becoming oversaturated, and that while Tether excels at the technology, he believes blockchains will eventually become commodities. Ardoino added that launching its own blockchain may not be the strategic move, given the abundance of excellent blockchains out there.
The move may come as a surprise, given Tether’s financial resources and the widespread use of USDT. However, the company doesn’t seem to be worried about the potential challenges of entering an already crowded market. Data from DefiLlama, cited by Bloomberg, shows that just five blockchains control about 86% of the total value locked in decentralized finance protocols.
Ethereum, the leading blockchain in terms of commercial importance, claims approximately $87.7 billion in total value locked (TVL) out of a total of $133.2 billion across all chains, according to DefiLlama.
Bloomberg points out that factors like high speeds, low fees, strong security, and practical use cases are critical to a blockchain’s success. Ethereum’s early entry into the market, its scalability for developers, and its position as the second most liquid token have contributed to its dominance, even with its relatively high fees.
Angela Ang, senior policy advisor at TRM Labs, a blockchain intelligence firm, notes that the blockchain ecosystem has become multi-chain, with developers and issuers active on multiple platforms. According to the Bloomberg article, Ang stressed that the commercial viability of these platforms depends on the ability to offer unique advantages, such as speed, security, cost, interoperability or other innovative features.
Tether’s CEO seems happy with the company’s current “blockchain agnostic” approach, as long as the platforms on which USDT is traded maintain high levels of security and sustainability. As Ardoino put it, “for us, blockchains are just transport layers.”
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